Precedential Decision by the Federal Circuit Affirms First IPR Appeal

Precedential Decision by the Federal Circuit Affirms First IPR Appeal

On Feb. 4, 2015, the Federal Circuit issued its very first ruling in an appeal from the Patent Trial and Appeal Board (“Board”) related to an inter partes review (“IPR”) proceeding under the America Invents Act (“AIA”). In addition to affirming the Board’s finding that Cuozzo Speed’s patent was invalid, the Federal Circuit also determined that the Board’s use of the broadest reasonable interpretation standard as part of its claim construction exercise was appropriate. Despite Cuozzo Speed’s attempts to convince the Federal Circuit that the Board erred by not implementing the district court’s narrower claim construction standard, the Federal Circuit reasoned that since the U.S. Patent & Trademark Office has used the broadest reasonable interpretation standard for many years, Congress must have impliedly intended this standard to be used in AIA reviews as well.

The Federal Circuit also found that the Board’s decision to institute an inter partes review under the AIA, even after a final decision, is non-reviewable. In reaching this conclusion, the Federal Circuit rejected Cuozzo Speed’s argument that the Board improperly decided to institute the inter parties review since it was not based on grounds specifically identified within the IPR petition. While the Federal Circuit did point out that mandamus relief may potentially be sought in situations where the Board exceeds its authority, it nevertheless reasoned that the statute clearly states that decisions to institute a review cannot be appealed at any time (citing 35 U.S.C. § 314(d), which states that "[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable").

Judge Newman offered a dissenting opinion postulating that the majority’s opinion frustrates the legislative intent behind the AIA, which was designed to serve as a “quick and cost effective” alternative to litigation. By not utilizing the same claim construction standard applied by district courts, she points out that it makes it difficult for the Board to serve as a fair substitute to district court litigation. Judge Newman also disagreed with the majority’s reasoning that the statute was intended to bar appealing any decisions made by the Board to institute a review. She challenged this notion by adding that the majority’s decision “appears to impede full judicial review of the PTAB’s final decision, further negating the purpose of the America Invents Act to achieve correct adjudication of patent validity through inter partes review.”